If your employer doesn’t offer you health insurance as part of an employee benefits program, you may be looking at purchasing your own health insurance through a private health insurance company.
A premium is the amount of money an individual or business pays to an insurance company for coverage. Health insurance premiums are typically paid monthly. Employers who offer an employer-sponsored health insurance plan typically cover part of the insurance premiums. If you need to insure yourself, you’ll be paying the full cost of the premiums.
How To Buy A Health Insurance In the USA
It is common to be concerned about how much it will cost to purchase health insurance for yourself. However, there are various options and prices available to you based on the level of coverage you need.
When purchasing your own insurance, the process is more complicated than simply selecting a company plan and having the premium payments come straight out of your paycheck every month. Here are some tips to help guide you through the process of purchasing your own health insurance.
- You may need to purchase individual healthcare coverage if you just turned 26, are unemployed or self-employed, work part-time, are starting a business that will have employees, or have recently retired.
- If you do not have the option of enrolling in an employer-sponsored health insurance plan, a good source for gaining insurance coverage is through the Health Insurance Marketplace that was created in 2014 by the Affordable Care Act (ACA).
- If you are at least 65 or disabled, you can enroll in Medicare, with the option to add additional coverage through a private Medigap or Medicare Advantage plan.
How Buying Private Health Insurance Works
Some Americans get insurance by enrolling in a group health insurance plan through their employers.
Medicare provides health care coverage to seniors and the disabled, and Medicaid has coverage for low-income Americans.1
Medicare is a federal health insurance program for people who are 65 or older. Certain young people with disabilities and people with end-stage renal disease may also qualify for Medicare. Medicaid is a public assistance healthcare program for low-income Americans regardless of their age.
If your company does not offer an employer-sponsored plan, and if you are not eligible for Medicare or Medicaid, individuals and families have the option of purchasing insurance policies directly from private insurance companies or through the Health Insurance Marketplace.
Scenarios When You Might Need Private Health Insurance
There are certain circumstances that make it more likely that you will need to purchase your own health insurance plan:
A Young Adult 26 Years of Age or Older
Under the provisions of the Affordable Care Act (ACA) of 2010, young people can be covered as dependents by their parent’s health insurance policy until they turn 26 years old. After that, they must seek out their own insurance policy.
If you lose your job, you may be eligible to maintain coverage through your employer’s health insurance plan for a period of time through a program called the Consolidated Omnibus Budget Reconciliation Act (COBRA). COBRA allows eligible employees and their dependents the option to continue health insurance coverage at their own expense.
While coverage through COBRA can be maintained for up to 36 months (under certain circumstances), the cost of enrolling in COBRA is very high. This is because the formerly employed person pays the entire cost of the insurance. Typically, employers pay a portion of healthcare premiums on behalf of their employees.
A Part-Time Employee
Part-time jobs rarely offer health benefits. A part-time job is any position that requires employees to work a lower number of hours than would be considered full-time by their employer, or 40 hours per week. If you work part-time, you usually must enroll in your own health insurance.
A self-employed person may work as a freelancer or own a business. Some self-employed people can get health insurance through a spouse’s plan. If not, they must provide their own health insurance.
A Business Owner Who Has Employees
If you start a business and you have employees, you might be required to offer them health insurance. Even if it’s not required, you might decide to offer health insurance in order to be a competitive employer that can attract qualified job candidates. In this situation, you will be required to purchase a business health insurance plan, also known as a group plan.